China Clean-Energy Aid Triggers Trade Complaint From U.S. Union
China Clean-Energy Aid to Draw Complaint by U.S. Steelworker
Tim Rue/Bloomberg
The complaint that China is doing too much to help its companies expand their clean-energy sales contrasts with international efforts to encourage renewable energy and reduce greenhouse-gas emissions in order to curb global warming.
The complaint that China is doing too much to help its companies expand their clean-energy sales contrasts with international efforts to encourage renewable energy and reduce greenhouse-gas emissions in order to curb global warming. Photographer: Tim Rue/Bloomberg
The United Steelworkers union filed a trade complaint with the U.S. government against renewable- energy products from China, urging an investigation of subsidies and preferences given by that nation.
Illegal export credits, preferences in bidding, restrictions on the export of minerals used in production and discrimination against foreign firms give Chinese producers an unfair advantage over competitors, the union said.
“They are subsidizing the export of these clean-energy products to the United States and then putting up walls to prevent us from exporting there,” Tom Conway, the union’s vice president, said in an interview.
The complaint that China is doing too much to help its companies expand clean-energy sales contrasts with international efforts to encourage renewable energy and reduce greenhouse-gas emissions in order to curb global warming. The complaint says that China’s aid, unlike that in the U.S., discriminates against foreign producers.
“You are going to see more and more of these trade and environment issues,” said Timothy Keeler, a lawyer at Mayer Brown LP in Washington. “It raises questions about whether there are conflicts between environmental goals and having domestic production.”
The union filed its complaint with the U.S. Trade Representative’s office under a procedure called Section 301. The Obama administration has 45 days to decide if it will investigate, a deadline that would require a decision before the November congressional elections.
USTR Review
The U.S. trade office “will review the petition in accordance with established procedures,” Nefeterius McPherson, a USTR spokeswoman, said in an e-mail.
To tackle climate change, all countries are seeking to develop clean energy and the steps by China’s government are in line with World Trade Organization rules, said a press official with the Chinese Commerce Ministry, who declined to be identified because of the agency’s rules.
The United Steelworkers announced a deal last month with A- Power Energy Generation Systems Ltd., based in Shenyang, China, and Shenyang Power Group in which the companies would buy about 50,000 tons of steel to be produced in American mills to supply production for a Texas wind farm. At the time, union President Leo Gerard said the threat of trade actions helped push the Chinese companies into the deal.
Asia makes more than half the world’s wind and solar energy equipment and is widening its lead. China invested $34.5 billion in low-carbon energy technologies last year, according to Bloomberg New Energy Finance. The U.S. spent $18.6 billion.
Wind Turbines
A U.S. Energy Department report released Aug. 4 found that an expanding share of wind-turbine equipment is being supplied domestically, as companies from the U.S. and abroad seek to reduce transportation costs and currency risks. U.S. content increased to about 60 percent in 2009 from about 50 percent the previous year, the department found.
U.S. trade law authorizes the government to investigate foreign barriers to exports in response to complaints. Unlike cases targeting imports into the U.S., the Section 301 process isn’t aimed at raising tariffs. It may lead to a U.S. complaint at the World Trade Organization or direct negotiations with Chinese officials.
“Section 301 is private party’s way to seek the U.S. government to bring a WTO case,” Alan Wolff, a former U.S. trade official and lawyer at Dewey & LeBoeuf in Washington. If the U.S. prevailed in a WTO case and China didn’t change its policies, it could lead to retaliation against China, he said in an e-mail.
To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net.
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